Leading cosmetics and snail cream manufacturer AmorePacific is exerting greater influence over domestic duty free stores throughout Korea as it’s range of beauty products become a must-buy with Chinese and other Asian tourists, according to industry experts.
Sales of AmorePacific products have have grown so significantly that they have no greatly surpassed those of leading luxury foreign brands Chanel, Hermes and Louis Vuitton at Korea’s major duty free outlet stores.
Doota and a number of other newly opened duty free stores have reported having trouble in attracting AmorePacific shops and concession stands due to the brand’s greater bargaining power on the back of a surge in sales.
According to sources at Lotte Duty Free, sales of AmorePacific brands account for 11% of all sales at the retailer for Q1 2016.
Coming in second were sales of products that full under Bluebell Korea, a local distributor for luxury European brands including Fendi, Louis Vuitton and a dozen others, with 8% of sales.
Cosmetics from LG Household and Health Care come in third, making up a further 7% of sales, followed by French brand Chanel, which accounted for 3% of sales.
Lotte Duty Free carry five of AmorePacific’s leading cosmetics brands, including Innisfree, Hera, Laneige, Lope and Sulwhasoo, as well as a number of it’s lesser brands, such as Etude House, among others.
“AmorePacific brands have become a household name for many Chinese and other Asian consumers who are increasingly fond of made-in-Korea beauty products,” said one official at the duty free shop base in Korea’s capital, Seoul.
“Besides its high product quality and reasonable prices, the company has been riding high on the Korean cultural wave sweeping Asia.”
The main factor for the growth of these brands is that many Chinese and other Asian women want to use cosmetics that are promoted by their favourite Korean celebrities, said an official for the retailer.
“They want to look like their Korean idols. When they come to Korea, they rush to duty free stores or other retailers to buy beauty products. This trend will likely continue and further boost AmorePacific’s sales.”
Sales of AmorePacific products at duty free stores throughout Korea exceeded 1 trillion won last year, up 703 billion won from 2014 and 348 billion won in 2013.
Thanks to the growing power of it’s brands, AmorePacific has started to exert considerably more bargaining power
when it comes to negotiating with duty free stores, giving their range of products a significant advantage over the competition.
It used to be the norm that AmorePacific stores were open and ready to greet customers when new duty free stores opened their doors to customers, however this is increasingly not the case, with one example being the newly opened Doota Duty Free store in Dongdaemun, which has been operating since the 20th of May and has so far failed to bring AmorePacific into the store.
“We are currently negotiating with AmorePacific over contract terms. The process is taking longer than expected,” said an official from Doota Duty Free.
Adding that “We expect the cosmetics maker will soon have a presence here. It’s just a matter of time.”